Apr 04, 2022
In General Discussions
If we are data-driven and interested in statistics, we can choose to monitor a wide range of sales metrics. Assuming we collect the data first, we can measure win rates, sales cycle velocity, changes in deal value or closing dates, and all other metrics. If our data is good enough and we know how to interpret it, and if we can slice and dice it (I realize these are big "ifs"), then we can draw some conclusions about how and where Powerful and illuminating conclusions about where we can most effectively improve sales performance and revenue reliability. But I thought of a metric that's easier to measure -- even with the least sophisticated CRM system or spreadsheet -- but can still lead to extremely dysfunctional behavior if not used intelligently. Can you guess what this is? This is the raw pipeline value and in naive hands it has to be the " most counterproductive sales metric" potential. As with many other apparently simple points, raw pipeline value is more useful in predictable, direct, numbers game-driven B2C or very simple B2B sales environments where output is closely related to a combination of input and energy related. Quality is more valuable than raw quantity... But in complex B2B sales, the obsession with raw sales channel value can lead to some truly counterproductive behaviors and negative sales consequences. Raw pipeline value is a quantitative indicator, not a qualitative one. We need to be aware of this, but we shouldn't use it as our primary measure of the health of our sales pipeline. Even weighted funnel value - if calculated naively by applying the same standard percentage to every opportunity that reaches a certain stage in the sales funnel - is not so good (the only efficient way to weight complex industry mailing list sales funnels) , which, by the way, evaluates each individual opportunity's chance of completion based on well-defined deal-specific eligibility parameters). But back to our old friend, raw pipe values. As we admit, this is a purely quantitative indicator. It assumes that the quantity and value of opportunities ( regardless of their quality ) have some useful predictive value. Driving stupid... But far from helping, the obsession with raw pipeline value can actually hinder salespeople, their managers, and demand generators in business development or marketing from making informed choices. When marketers and business development reps are flooded with weakly qualified opportunities at the top of the sales funnel that will never close, this can convince marketers and business development reps that they are doing well and are competing for attention. And it can (I've seen it happen) prevent otherwise seemingly sensible salespeople from excluding their weaker opportunities out of fear that their sales managers will give them a hard time shrinking the pipeline -- an "unintended consequence" "Interesting embodiment of the law". Send the right signal... Level 1 (and above) sales managers have a significant responsibility in this area, especially if their primary focus is on the easy-to-measure (raw pipeline value) rather than the hard-to-measure but more valuable metrics that properly reflect the pipeline true quality.